Georgia court backs recourse

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The Superior Court of Gwinnett County, Georgia, ruled in June that a motor carrier had “a presumptive right of the carrier to collect directly from the shipper unless there is express waiver … even if the result is double payment by the shipper.”

The decision in Southern Freight Inc. v. LG Electronics USA advances recent district court decisions in Washington and Texas holding that in the absence of an intentional waiver, a motor carrier has recourse to the shipper for payment of freight charges when a broker or other intermediary is unwilling or unable to pay freight charges.

A broker retained by LG Electronics went bankrupt in late 2005 owing freight payments to Southern Freight for 69 loads. The judge ruled that the bills of lading constituted contracts between the shipper and the carrier and that the shipper’s contract with the bankrupt broker did not trump the bills of lading. The judge further held that failure to comply strictly with time limitations in federal credit regulations does not bar a claim for collection of freight charges.

The court’s decision relied heavily on the Eleventh Circuit’s decision in National Shipping Co. of Saudi Arabia v. Omni Lines and the Fourth Circuit’s decision in Hawkspere Shipping Co., Ltd. v. Intamex, thereby affirming that precedent for recourse involving other modes of transportation also applies to motor carrier shipments. (Civil Action No. 05-A-13469-3)